Analysis determines that the Canadian Dollar is to be sold against stronger currencies ($USDCAD) prior to the GDP data on Thursday. If the report shows an expansion then any longs should be aborted and planned for a lower re-entry.
The Governing Council of the Bank of Canada met a couple of weeks ago on the 7th of September and a decision was made to hike the Overnight Rate (Interest Rate) by 75bps from 2.50 percent to 3.25 percent which was as expected. The policy outlook is hawkish as Trading Economics are forecasting rates to be at 4 percent next year in 2023 although falling to 3.75 percent in 2024. The next scheduled meeting for the governing council is in several weeks on Tuesday the 26th of October.
With regards to economic indicators, the CPI rate for the twelve months to August was reported last week at 7.0 pecent which was below expectations of 7.3 percent and reflective of the falling costs of gasoline (35.6 vs 54.6).
The near-term attention of speculators is on the preliminary GDP monthly growth rate report for August which releases on Thursday and is expected to show a 0.3 percent contraction. This is a lagging indicator but would be reflective of a worsening situation.
The sentiment that is presently influencing the valuations on the Canadian Dollar is the narrative regarding the slowdown of global growth as the pessimistic outlook is expected to lower the demand for oil which significantly affects the Canadian economy as an oil exporter. - subscribe to email alerts of orders and 'Forex Field-Guides'
Subscribe with a 50% discount to view 'Forex Field-Guides' which offers a more comprehensive research report packed with information that is intended to be used so you can improve your own analysis.
-END DISCLAIMER-
The content provided is intended for informational purposes only. Investments on the forex markets and trading decisions are made at your own risk.